AUR#714 June 19 Ukraine VS Saudia Arabia, World Cup Crisis For Ukraine; Bank IPO’s; Gazprom & Turkmen Gas; Europaralysis; Struggle For Future Of Ukraine

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ACTION UKRAINE REPORT – AUR           
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                     In-Depth Ukrainian News, Analysis and Commentary

                      Ukrainian History, Culture, Arts, Business, Religion,
         Sports, Government, and Politics, in Ukraine and Around the World       

 
         EIGHTY-FIVE DAYS SINCE UKRAINIAN ELECTION
                       STILL NO COALITION……STAY TUNED

 The Action Ukraine Report (AUR) brings you the action from Ukraine.
     Send the AUR to your colleagues and friends..keep them informed!   
             
ACTION UKRAINE REPORT – AUR – Number 714
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED FROM KYIV, UKRAINE, MONDAY, JUNE 19, 2006

           –——-  INDEX OF ARTICLES  ——–
         Clicking on the title of any article takes you directly to the article.               
Return to the Index by clicking on Return to Index at the end of each article
1.          SHEVCHENKO THE KEY FOR STRUGGLING UKRAINE
Agence France-Presse, Germany, Monday, June 19, 2006

2.       SAUDI ARABIA LOOKING TO MATCH OPENING GAME
FEAT, UKRAINE DESPERATE TO AVOID REPEAT PERFORMANCE 
Erica Bulman, Associated Press, Germany, Sunday, Jun 18, 2006

3. CHAOS REIGNS WHILE UKRAINE SEEKS TO SAVE NATIONAL FACE
By Jonathan Wilson, Financial Times, London, UK, Sunday, June 18, 2006

4.            A KIND OF HOMECOMING FOR UKRAINE’S ‘SHEVA’
By Kevin O’Flynn, Staff Writer, Moscow Times
Monday, June 19, 2006. Issue 3434. Page 1.

5CHEERS FROM AFAR, UKRAINE’S DEBUT GETS LOCAL SUPPORT
By Tamara King, Staff Reporter, Winnipeg Sun
Winnipeg, Manitoba, Canada, Thursday, June 15, 2006

6.     MUST WIN AGAINST SAUDI ARABIA, LIVE ON UKRAINATV
From: UkrainaTV.com; ukietvlist@ukrainatv.com
Sent: Monday, June 19, 2006 3:35 AM
Subject: [announce] Ukraine Soccer Live on UkrainaTV

7.       UKRAINE: SEVERAL BIG DOMESTIC BANKS TO MAKE IPOs.
IntelliNews – Ukraine This Week, Weekly News Digest
Kyiv, Ukraine, Tuesday, June 13, 2006

8. LUKOIL READY TO INVEST EXTRA USD 100 MILLION IN UKRAINE

Kostiantyn Druzheruchenko, Ukrainian News Agency
Kyiv, Ukraine, Saturday, June 10, 2006
Kommersant, Moscow, Russia, Friday, June 16, 2006

11.            UKRAINE COMPLETES WTO TALKS WITH TAIWAN
CNA, Geneva, Switzerland, Monday, June 19, 2006

12. KAZAKHSTAN SUCCESSFULLY LAUNCHES ITS FIRST SATELLITE
        Sea-Launch Co satellite also launched from floating platform in Pacific
Associated Press (AP), Baikonur, Kazakhstan, Sunday, June 18, 2006

13.   US TAXPAYERS PAY FOR UKRAINIAN URBAN DEVELOPMENT
Regnum, Moscow, Russia, Saturday, June 17, 2006

14CREDIT RATING AGENCY ASSIGNS RATING TO BONDS ISSUED

Ukrainian News Agency, Kyiv, Ukraine, Sunday, June 18, 2006

15.                      ANTI-SEMITISM AT UKRAINIAN PARLEY
Charles Fenyvesi, Editor, Bigotry Monitor: Volume 6, Number 21
Weekly Human Rights Newsletter on Antisemitism, Xenophobia, and
Religious Persecution in the Former Communist World and Western Europe
UCSJ: Union of Councils for Jews in the Former Soviet Union
Washington, D.C., Friday, June 16, 2006

16.        SIGNATURES ON REFERENDUM ON UKRAINE JOINING
                     NATO ALLEGEDLY FORGED OFFICIAL SAYS
Associated Press (AP), Kiev, Ukraine, Saturday, Jun 17, 2006

17.              EUROPE TWITCHES OUT OF EUROPARALYSIS
EDITORIAL COMMENT: Financial Times
London, United Kingdom, Saturday, June 16 2006

18.      YUSHCHENKO NOT TO USE ADMINISTRATIVE LEVERS

                         TO FORM POLITICAL COALITION
Ukrainian News Agency, Kyiv, Ukraine, Sunday, June 18, 2006

19YUSHCHENKO SAYS TYMOSHENKO SHOULD DEMONSTRATE

      ABILITY TO BE EFFECTIVE IN UKRAINIAN COALITION TALKS 
Interfax, Kyiv, Ukraine, Saturday, June 17, 2006

20UKRAINE LEADERS WORK THROUGH WEEKEND ON COALITION
Reuters, Kiev, Ukraine, Monday, 19 June 2006

 
The ISCIP Analyst, An Analytical Review, Volume XII, Number 6
Institute for the Study of Conflict, Ideology & Policy
Boston University, Boston, MA, Thursday, June 15, 2006
 
 
23ODESSA PHILHARMONIC ORCHESTRA WITH CONDUCTOR
         HOBART EARLE TO PERFORM TWO CONCERTS IN KYIV
                       Sunday, June 18 and Monday, June 19, 2006
Action Ukraine Report #713, Article 23, Kyiv, Ukraine, Sat, June 17, 2006
 
                      WAITING GAME SELLS UKRAINE SHORT
INFORM: Newsletter for the international community providing
views and analysis from the Tymoshenko Bloc (BYUT)
Kyiv, Ukraine, Issue 3, Thursday, 15 June 2006
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1
   SHEVCHENKO THE KEY FOR STRUGGLING UKRAINE

Agence France-Presse, Germany, Monday, June 19, 2006

Ukaine is looking for a return to form for star striker Andriy Shevchenko to
get its stuttering World Cup campaign back on track against Saudi Arabia in
the Group H match in Hamburg on Tuesday morning (AEST).

Oleg Blokhin’s side suffered a shock 4-0 trouncing at the hands of Spain in
their opening match, a result that set them back in their bid to progress to
the knock-out phase of the World Cup, while Saudi Arabia was held to a 2-2
draw with Tunisia.

Saudi Arabian coach Marcos Paqueta boldly criticised Ukraine as “weak” after
its Spanish debacle and suggested the World Cup debutants needed to change
their tactics after finding themselves bottom of Group H following the first
set of matches.

“Ukraine is a weak team,” said the Brazilian, whose team leaked a goal to
Tunisia two minutes into injury time for the north Africans to sneak a draw.

“The team will improve their performance for Ukraine,” vowed a confident
Paqueta on Sunday. “We have a greater chance of qualifying than many people
think.

“We have studied the opposition and there is no doubt that Ukraine is a very
strong team, but we will do our maximum to get the points, the adequate
result to qualify for the next round.

“It’s important that the players embrace the same warrior spirit for the
second game as they did for the first.”
Warning enough for the Saudi back four that they can expect a barrage of
attacks spearheaded by Chelsea’s record new signing Shevchenko.

The former AC Milan striker has been struggling with a knee injury and he
looked out of sorts against the Spaniards, although he said just getting
that match under his belt would help.

“I’m glad I played the full 90 minutes after not being in action for such a
long time,” he said. “The knee was fine but my physical condition is still a
long way from my optimal form, but I need to play games to get that form.”

It it was a lack of Ukrainian firepower during the Spain game that was most
evident, with the former Soviet republic only mustering two shots on target
during the entire 90 minutes.

Saudi Arabia has not won a match since its first appearance in the 1994
World Cup when it reached the second round.

Paqueta will be hoping for more of the same from striker Sami al-Jaber, a
veteran of four World Cup campaigns who joined an elite club when he came
off the bench to score for the ‘sons of the desert’ against Tunisia.

The 34-year-old became only the fourth player to have scored at World Cups
12 years apart, joining Pele, German great Uwe Seeler and Maradona.

Both scored their first World Cup goals in 1958 and last in 1970, meaning
Jaber, who puts his longevity down to a special diet and employing a fitness
trainer, is the first to achieve the feat in 36 years.

“We have lost a lot of confidence since 2002 (when Saudi Arabia lost every
match) and the first half against Tunisia wasn’t good, but after that 45
minutes we came back to do what we really came for,” said Jaber. “We will
need to play with more spirit and confidence against Ukraine.”

Midfielder Oleg Gusev is doubtful for Ukraine after injuring his left knee
in the loss to Spain. The Dynamo Kiev player, who failed to appear for the
second half against the Spanish, has been unable to train since the match.
Gusev apart, coach Blokhin will have all his players available for a game
his side must win.                                -30-

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2.      SAUDI ARABIA LOOKING TO MATCH OPENING GAME
FEAT, UKRAINE DESPERATE TO AVOID REPEAT PERFORMANCE 

Erica Bulman, Associated Press, Germany, Sunday, Jun 18, 2006

Saudi Arabia knows if it performs like it did against Tunisia, it has a
change to advance at the World Cup. If Ukraine plays anything like it did
against Spain, the Eastern Europeans will be booking tickets home early.

Ukraine and Saudi Arabia meet for the first time in Group H action at
Hamburg on Monday in a match that both teams must win if they hope to
advance.

“We still have a chance so we’ll play each of our games like it’s the last
one,” Ukraine striker Andriy Shevchenko said. “The match against Saudi
Arabia is our last chance and we are preparing for that game with that in
mind.

“The defeat to Spain was not a good thing, but we have two more matches. We
knew Spain was the toughest team in the group. But the most important match
lies ahead.”

Despite being ranked 40 spots below Spain, Ukraine still had had been
expected to provide strong resistance, especially when Shevchenko was
declared recovered from a knee injury.

Instead, Ukraine left the playing field humbled 4-0, unable to come up with
any concrete reasons for the drubbing but complaining bitterly about the
searing heat, which they felt favored the Spaniards.

“Losing against Spain 4-0 does not mean Ukraine is an easy team,” Saudi
veteran Sami al-Jaber warned. “We respect the side and we know the players
will be motivated to win against us. We will not underestimate them but we
need to win this match.”

Saudi Arabia, another team which prefers sultry temperatures, is no longer
the pushover it was four years ago when it was demolished 8-0 by Germany in
the first round.

In its last two World Cup appearances, Saudi Arabia played a total of four
matches against European teams without scoring a single goal. But on
Wednesday, the Saudis tallied twice and took a point from their 2-2 draw
with Tunisia.

Still, if they were thrilled with the point, the Saudis know victory could
have been theirs. After trailing at halftime, Saudi Arabia rallied to score
twice and take a 2-1 lead. But a late equalizer in injury time left the
Saudis kicking themselves.

Saudi Arabia plans to take this lesson into their clash with Ukraine. “It’s
a very important match for us and we have to do everything we can to win it.
The first 15 minutes will be crucial,” Saudi Arabia coach Marcos Paqueta
said.

Shevchenko was impressed after watching videotape of the Saudi team. “This
is a team that hasn’t really played in any serious competitions, but they
gave me a very good impression,” he said. “We need to be very careful and
make the most of this second chance.”

Ukraine is hoping midfielders Oleg Gussev and Andriy Vorobey will be fit to
play. Gussev injured his knee and Vorobey his shoulder against Spain.

Ukraine already is without defender Vladyslav Vashchuk, who received a red
card in Wednesday’s 4-0 loss to Spain and will have to complete a one-game
suspension.

Saudi Arabia has no major injuries. Spain lead the group with three points.
Tunisia and Saudi Arabia each have one while Ukraine has none.

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3. CHAOS REIGNS WHILE UKRAINE SEEKS TO SAVE NATIONAL FACE

By Jonathan Wilson, Financial Times, London, UK, Sunday, June 18, 2006

There was a new joke doing the rounds in Ukraine last week. “Mummy, mummy,”
a small boy says. “What’s daddy’s job?” “He’s a footballer,” his mother
replies. “And what does a footballer do?” “He disgraces his nation.”

Having been the first European nation to qualify for the World Cup, the 4-0
defeat to Spain in their opening game hurt deeply. All the eastern European
sides – if you count the Czechs as central Europeans – began badly, but
nobody worse than Ukraine and, the gallows humour aside, recent days have
been spent in agonised soul-searching ahead of today’s crucial meeting with
Saudi Arabia in Hamburg.

“The main reason for the defeat was that we didn’t control possession,” said
the former Dynamo Kiev star Serhiy Shmatovlenko. “The team just hit
primitive long-balls at [Andriy] Shevchenko and [Andriy] Voronin, and we
couldn’t even string three passes together in the first half.”

The heat in Leipzig was partly responsible, but so too was Shevchenko – “the
world’s most expensive statue”, as one Ukrainian newspaper dubbed him this
week – who looked far from fit after his six-week lay-off with a knee
injury. “The knee was fine,” Shevchenko said, “but my physical condition is
still a long way from my optimal form.”

It was taken as evidence of the seriousness of Ukraine’s problems that, in a
nation where coaches hardly ever criticise their players publicly, Oleg
Blokhin laid into his side afterwards. “We were playing like the worst team
in Europe,” he said, before apologising to fans for “the embarrassment” and
condemning the “laziness” of his players.

Compounding the dissatisfaction were sightings of the midfielder Oleg Husyev
and the defender Vladimir Yezerskyi in a bar the night after the game.
Worse, they seemed to be enjoying themselves. Blokhin promised to have
“serious words”.

Fans may have had rather more sympathy with the climatic explanation for
Ukraine’s failings had it not been for Vladyslav Vaschuk also offering the
bizarre excuse that the croaking of frogs outside his window in the team’s
base in Potsdam had kept him awake.

The defender has taken the brunt of his nation’s anger for his sending off
in conceding a penalty just before half-time. “His suspension is not a loss
but a bonus,” said Oleg Salenko, top-scorer at the 1994 World Cup.

Replacing him, though, will not be easy. Vaschuk was only playing because of
the hip injury that ruled Serhiy Federov out of the tournament, and with the
reserve central defenders Dmytro Chigrynskyi and Oleksandr Yatsenko still
carrying knocks from last month’s European Under-21 championship, midfielder
Andriy Husyn will almost certainly be asked to cover.

With Husyev suffering a knee problem and forward-cum-winger Andriy Vorobey
doubtful after damaging his shoulder, things could hardly be more chaotic.
“We have to pick ourselves up psychologically,” admitted Ukraine’s assistant
coach Semin Altman.

Given how brutally their deficiencies were exposed, that will be difficult,
but Ukraine will have drawn comfort from the sight of the Saudi Arabia team
arriving for training muffled in layers of sweatshirts, coats and, in two
cases, ski-caps after temperatures fell to 15 degrees. “Like higher
temperatures for Ukraine,” said their coach Marcos Paqueta, “playing in rain
is very dangerous for us. I need the sun to come out.”

As well as looking to the weather forecasts, Ukraine may also seek
inspiration from the past, with Blokhin considering reprising the Dynamo
Kiev strike partnership of Shevchenko and Serhiy Rebrov. Seven years ago, as
Dynamo Kiev reached the semi-finals of the Champions League, it was arguably
the most potent pairing in European football, but since then the duo’s
careers have diverged.

While Shevchenko has come to be hailed as the most complete striker since
Marco van Basten and earned moves to AC Milan and Chelsea, Rebrov has
stagnated, drifting from Tottenham to West Ham and then to Fenerbahçe in
Turkey. A return to Dynamo, though, has rejuvenated the 32-year-old, and he
was named Ukrainian Player of the Year last season.

“We feel great pressure now,” Rebrov said. “Everybody knows we have to win
this next match. We wanted to play good football and to collect at least a
point against Spain, but we failed.” That may not matter, as Saudi Arabia’s
draw with Tunisia means wins in their next two games would take Ukraine into
the next round. They would have been confident of achieving that before the
tournament, but now there is a distinct edginess around the camp.

If only everybody was as calm as Hrihoriy Surkis, president of the Football
Federation of Ukraine. “The way to paradise,” he said, “is not laid just
with roses, but with thorns as well. We probably needed this trial, so we
can rise from the humiliation and walk even further.”     -30-

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4.     A KIND OF HOMECOMING FOR UKRAINE’S ‘SHEVA’

By Kevin O’Flynn, Staff Writer, Moscow Times
Monday, June 19, 2006. Issue 3434. Page 1.

POTSDAM, Germany — For most of the past week, Ukraine’s top striker,
Andriy Shevchenko, has been hanging out with his teammates in the town
of Potsdam, just outside Berlin.

It is a limited life for the football players, who are regrouping after a
recent loss. Ukraine will try to vanquish the 4-0 loss it suffered in its
debut against Spain last week by beating Saudi Arabia in Hamburg on Monday.
Anything but a win will make qualification for the knockout stages of its
first World Cup all but impossible.

For Shevchenko, Ukraine’s choice of base for the World Cup is a welcome if
coincidental return to a family home. The son of a Soviet military officer,
Shevchenko came close to being born near this town in what was once East
Germany — not far from the hotel where the team is based.

His father, Nikolai, served in a Soviet tank division that was based in East
Germany and lived in a closed village located just an hour’s drive from
Potsdam from 1965 to 1975.

Shevchenko, together with his parents, sister, American model wife and son,
Jordan, traveled last Thursday to the old family home. “We had a free day
and we went there to the former unit where my father lived,” Shevchenko said
after a training session Friday. “It’s about 70 kilometers from here. That’s
where my sister was born, and she was only 2 years old when my family left
there.”

Shevchenko, popularly known as “Sheva,” was born in Dvirkivschyna, near
Kiev, in 1976, shortly after his family returned to Ukraine. Some say he was
conceived in Germany.

“We saw the village where my parents lived — my father served there for 10
years. It was a closed village,” he said. “There are other people living
there, so we went in and looked very carefully, didn’t bother any one, and
then we left.” He had expressed the desire to visit the family home before

the World Cup, which started June 9.

His father recently told Ukrainian television that the home had water and
gas — a rare luxury in that area of East Germany at the time. Potsdam has
long played a much larger role in history than might be expected for a town
of 150,000.

Founded as a royal residence and a garrison for the Prussian army, its most
striking landmark is Sanssouci Palace, which was built for Frederick the
Great in the 18th century.

It was in the town’s Cecilienhof palace that the victorious allies —
Stalin, Churchill and Truman — met to draw up the boundaries of postwar
Europe. Potsdam was also a crucial military base for Soviet soldiers during
the Cold War.

The town has changed dramatically since unification and is now one of the
most expensive cities in the former East Germany.

“Much has changed. Only the blind cannot see how people live” these days,
said former footballer Vladimir Muntyan, who played a number of times in
East Germany for the Soviet team and is now part of the Ukrainian Football
Association’s delegation. “It is completely different.”

But traces of life behind the communist bloc remain visible even for
footballers cosseted away in an expensive hotel.

The Luftschiffhafen stadium, where Ukraine has been training, is a familiar
sight to anyone who has been to a former Soviet football stadium — heavy on
concrete and with a huge scoreboard that looks like it has been transported
from a provincial Soviet town.

A group of local politicians played a team of Ukrainian veteran footballers
in a match Saturday at Potsdam’s Lokomotiv sports field — the name
betraying another symbol of Soviet influence in the region. Lokomotiv was
the team founded by the Soviet Railways Ministry. Soviet satellite states
often replicated Soviet team names — with army and railway sides such as
CSKA Sofia in Bulgaria and Lokomotiv Leipzig.

The sports field is only a few hundred meters from Glienicke Bridge, where
Americans and Soviets exchanged spies and political prisoners during the
Cold War. American pilot Francis Gary Powers, whose U2 spyplane was shot
down over the Soviet Union in 1962, and future Israeli politician Anatoly
Sharansky were two of those exchanged on the bridge.

“Ukraine was much better than us,” said a perspiring Clemens Appels, the
secretary of state for Brandenburg, after coming off the pitch. “We are very
proud that Ukraine is in Potsdam. We hope they win so that they can stay
here longer. … It is the only team in the new lands” he said, translating
neue länder — the Germand phrase for the old East Germany.

It’s unlikely that Shevchenko wants to win for that reason, but he will
certainly be happy to stay in Potsdam a little longer.      -30-
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LINK: http://www.themoscowtimes.com/stories/2006/06/19/003.html
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5. CHEERS FROM AFAR, UKRAINE’S DEBUT GETS LOCAL SUPPORT

By Tamara King, Staff Reporter, Winnipeg Sun
Winnipeg, Manitoba, Canada, Thursday, June 15, 2006

WINNIPEG – They crowded around a statuette of the man credited with being
the saviour of the Ukrainian language. But the nine-inch likeness of Taras
Shevchenko —  who happens to share the last name with the Ukraine’s star
striker, Andriy Shevchenko — wasn’t enough to bring Ukraine a victory in
its first World Cup soccer bid since formally breaking from the former Soviet
Union in 1991.

“We were hoping he might bring some luck, but unfortunately, it didn’t
happen today,” said Dobryan Tracz, looking perfectly patriotic as he watched
the game at Prosvita, a Ukrainian bar in Winnipeg’s North End.

Much to the delight of at least one patron, Spain overpowered Ukraine 4-0 in
yesterday’s first Group H match. “I’m very happy,” said Spanish-born Pedro
Perez-Martin, almost overpowered in a rare rowdy moment where the crowd
started shouting “U-kray-ee-na” when Spain was ahead by three.

Perez-Martin said he didn’t mind watching the game among Ukraine fans,
citing the “good food.” The club offered a full buffet-style breakfast that
included perogies, the stereotypical Ukrainian staple.

Ranging from Ukrainian-Canadians appearing old enough to have lived through
the Second World War, to young Canadians of Ukrainian descent still keen to
cling to their roots, more than 100 people packed Prosvita yesterday.

“When something’s happening in the Mother Country, people get bizarrely
patriotic,” said 23-year-old Andriy Michalchyshyn.

Growing up thousands of kilometres from eastern Europe, Michalchyshyn’s
technically Canadian but keeps close to his culture, learning Ukrainian at
home in Winnipeg.

There was an exodus from the North End bar after Spain’s fourth goal, which
turned out to be the final, giving them the biggest margin of victory so far
at this year’s tournament.

“It is unfortunate that we’re losing, but they’re playing against one of the
best teams in the world,” said Ukraine fan Michael Gorun. “We’re proud of
our team, it’s the first time we’ve been in the tournament as an independent
nation.”

In spite of the outcome, it’s still a historic day for Ukrainians, said
Taisa Monastyrski. “It was sad, but it was still a big day — it was our
first game as an independent nation,” she said.
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http://www.winnipegsun.com/Sports/WC2006/2006/06/15/1633988-sun.html
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6.    MUST WIN AGAINST SAUDI ARABIA, LIVE ON UKRAINATV

—– Original Message —–
From: UkrainaTV.com; ukietvlist@ukrainatv.com
Sent: Monday, June 19, 2006 3:35 AM
Subject: [announce] Ukraine Soccer Live on UkrainaTV

Ukraine with its star player Andriy Shevchenko will have to beat Saudi
Arabia team, only slightly better placed in Group H.

Oleg Blokhin’s men still have a very good chance to advance to the next
round of FIFA World Cup Finals after they beat Saudi Arabia on Monday in
Hambur, and Spain perform just as impressively against Tunisia, then they
could yet go into the third round of matches well-placed to progress out of
the Group H.

Watch this amazing, do or die battle for Ukraine, live on UkrainaTV.com.

For more details click on the following link:
http://www.ukrainatv.com/index.php?fuseaction=files.list&categoryid=6
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7.     UKRAINE: SEVERAL BIG DOMESTIC BANKS TO MAKE IPOs.

IntelliNews – Ukraine This Week, Weekly News Digest
Kyiv, Ukraine, Tuesday, June 13, 2006

Expert: several big domestic banks to make IPOs. According to analytical
report of Troyka Dialog investment company several big domestic banks
intend to make IPOs or to attract strategic investors soon. In particular,
the investment company names TAS-Investbank, Finance&Credit Bank,
Ukrgasbank and Nadra Bank.

Thus, the company does not recommend selling securities of Ukrgasbank, the
market value of which makes up USD 202mn. The bank already increased its
authorized capital to USD 39.6mn and plans to raise it again by USD 10mn by
the end of 2006. Besides, Ukrgasbank intends to increase its total assets by
45% in 2006 and to receive credit rating from Moody’s this summer.

Ukrgasbank (Kyiv) was founded in 1993. It increased its total assets by
10.2% ytd to USD 526mn in Jan-Mar. It was ranked 19th in terms of total
assets. Finance&Credit, the other bank mentioned in the report, was founded
in 1990. Its net assets went up by 9.6% ytd to USD 969mn in Jan-Mar.

According to the bank’s data its main shareholders are F&C Realty (48.7%)
and Ascania Co. (48.3%). The bank was ranked 10th in terms of total assets
as of Apr 1, 2006.

TAS-Investbank that is legal successor of Societe Generale Ukraine (founded
in 1996) belongs to TAS financial group. It increased its total assets by
0.9% ytd to USD 250mn in Jan-Mar. TAS-Kommerzbank (56.6%) and TAS-
Capital insurance company (33.7%) are the main shareholders of the bank.

Nadra Bank was founded in 1993. It increased its total assets by 12% ytd to
USD 1.32bn. It was ranked 9th in terms of total assets as of Apr 1, NBU
reported.                                        -30-

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8. LUKOIL READY TO INVEST EXTRA USD 100 MILLION IN UKRAINE
 
Kostiantyn Druzheruchenko, Ukrainian News Agency
Kyiv, Ukraine, Saturday, June 10, 2006
 
KYIV – Russia’s company Lukoil Neftekhim is ready to invest in the statutory
fund of joint venture Lukor (Kalush, Ivano-Frankivsk region) extra USD 100
million in exchange for signing an amicable agreement with the State
Property Fund.  Lukor Director General Sergey Chmykhalov said this in
interview with newspaper Delo.

“We agree to give Ukraine over USD 100 million more, just if it serves as a
basis for signing an amicable agreement,” he said.
He also added that Lukoil Neftekhim was ready to invest in Lukor’s statutory
fund UAH 562 million instead of the shares of its subsidiary in case Ukraine’s
State Property Fund withdraws its claims.

Chmykhalov said that Lukoil Neftekhim had invested in the statutory fund of
Lukor shares of the Lukoil Neftekhim Ukraine company (100% of the shares
belong to Lukoil Neftekhim) instead of money in order to avoid taxes,
excises and customs duties.

“If we have invested this money into the statutory fund and then buy with it
raw materials and other stuff, we would have to pay around 40% of taxes,
excises and customs dues. Then we met with representatives of the State
Property Fund, and the Industrial Policy Ministry to decide what to do.
Representatives of the regional state administration were also present at
the meeting. Its protocol is available,” he added.

In his words, Lukoil Neftekhim intends to secure the purchase of 48% of
Lukor’s shares belonging to the State Property Fund.

“We are offering the state to buy these 48% of the shares, and guarantee
investment of minimum $300 million in the enterprise… Let them even say
that $300 million is not enough; let it be $450 million. But they must say
it clearly, and we will sign the document,” he said.

He also informed that the State Property Fund values 48% of its shares at
USD 20 million.

Chmykhalov noted that Lukoil Neftekhim intended to hold all talks with the
Cabinet of Ministers rather than with the State Property Fund.

As Ukrainian News earlier reported, the tax administration in
Ivano-Frankivsk region attributes the losses of Karpatnaftokhim and Lukor to
their payments through offshore banks. Lukor finished 2004 with a loss of
UAH 429.353 million.

In March the High Business Court rejected the request of the Ivano-Frankivsk
regional prosecutor’s office and left unchanged the decision of the regional
business court on legitimacy of the contribution of assets of petrochemical
complex Lukor into the statutory fund of Karpatnaftokhim.

LukOil Chemical B.V. (Netherlands) and Lukor created the Karpatnaftokhim
company on October 29, 2004, with a statutory capital of UAH 30,000. The
statutory capital was later increased to UAH 1.581 billion (Lukor
contributed 24% or UAH 379.5 million while Lukoil Chemical B.V. contributed
76% or UAH 1.2 billion).

Karpatnaftokhim specializes in the production of chlorine, caustic soda,
vinyl chloride, ethylene, polyethylene, and propylene.

The Lukoil Neftekhim company and the Oriana chemical concern (Kalush,
Ivano-Frankivsk region) founded Lukor in December 2000 on the basis of
Oriana’s petrochemical complex. According to information from Lukor, Lukoil
Neftekhim owns 52% of the shares in Lukor while Oriana owns 48%.
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9. IFC LOANS USD 8 MILLION TO UKR CONSUMER GOODS COMPANY

Pavlo Kharlamov, Ukrainian News Agency, Kyiv, Ukraine, June 14, 2006

KYIV – The International Finance Corporation (IFC) has provided a loan of
USD 8 million to the Savservis company (Kyiv).  The IFC announced this in a
statement, a text of which Ukrainian News obtained.

The loan was provided to the company to enable it to expand its warehousing,
customs licensing, and logistics business, which will enable it to boost the
volume of its operations and improve the quality of its services.

The Savservis company was founded in 1992 as a limited liability company. It
specializes in retail and wholesale trade in goods that are in high demand:
foodstuffs, tobacco goods, alcohol, and household chemicals.

The company is part of the Asnova Holding group, which also includes DTs
Ukraina, Komora-C, DTs-Plius, S.O.T.Bi, and Esma. As Ukrainian News earlier
reported, the IFC had invested about USD 480 projects in 23 Ukraine as of
May 1. Ukraine joined the IFC in 1993.                     -30-

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10.         GAZPROM TO DEPRIVE UKRAINE OF TURKMEN GAS

 
Kommersant, Moscow, Russia, Friday, June 16, 2006

Russia managed to outrun Ukraine at negotiations on purchase of Turkmen

gas. President of Turkmenistan Saparmurat Niyazov may sign a contract with
Gazexport in a few days on supplies of natural gas in the second half of
2006. The matter is about sale of 20 billion cubic meters of gas formerly
contracted by Naftogaz Ukrainy at $50 per 1,000 cubic meters at a higher
price.

Ukrainian government already called the future gas contract between Russia
and Turkmenistan a serious problem and calculated that in case of its
signing Naftogaz Ukrainy would lose $1.65 billion.

On June 15, Niyazov announced, “Very soon a Russian delegation will arrive
to Ashkhabad. They will sign a contract on gas purchase for the second half
of the year with us.” Niyazov explained, “They (Gazprom) have a possibility
of transportation and marketing. We will reach an agreement on price and
volumes and will sign an agreement. This will be a large contract.”

A source acquainted with the course of negotiations explains that the
President of Turkmenistan proposes Gazprom to sign a separate agreement for
the period between 2006 and 2008 for sale of 50 billion cubic meters of gas
a year to the Russian monopoly at a fixed price.

In the framework of this document Niyazov wants to sign a contract for
supply of 20 billion cubic meters of gas in the second half of 2006. Sergei
Kupriyanov, press secretary of Gazprom, confirms that the visit of Alexei
Miller to Ashkhabad is planned for the next few days but refuses to provide
further comments.

Meanwhile, on June 14 acting Ukrainian Fuel and Energy Minister Ivan
Plachkov announced the planned negotiations with Turkmenistan on restarting
of direct gas supplies. Ukraine consumes about 75 billion cubic meters of
gas a year but produces only 20 billion cubic meters on its territory.

The price of supplies from Turkmenistan for the second half of the year is a
key issue for Ukraine. Since the beginning of the year, gas prices for
Ukraine grew almost by 100%. Gazprom promises further raising of prices
starting from the second half of the year.

According to a source close to negotiations, Niyazov actually already chose
Russia. He decided not to wait for return of the debt of $63 million by
Naftogaz Ukrainy and to sell the gas remaining at disposal of Turkmenistan
to solvent Gazexport subsidiary of Gazprom. At the end of 2005, the
President of Turkmenistan demanded $80 per 1,000 cubic meters from the
buyers but Gazexport contracted 30 billion cubic meters at $65 per 1,000
cubic meters.

A source in Gazprom presumed that the new contract would be signed on the
terms of the Turkmen party. According to the source, capacity of the
pipeline Central Asia-Center in the territory of Uzbekistan is limited and
purchase of Turkmen gas may be increased only to 41-42 billion cubic meters.
Thus, Russia can buy not more than 11-12 billion cubic meters of gas a year
additionally. Along with this, the source states that the Russian monopoly
will insist on preserving of the current price of gas.

Analyst Valery Nesterov of Troika Dialog investment company remarks that
events of the last few months enable the Turkmen President to feel more
confidently at negotiations with Gazprom. Turkmenistan signed a framework
agreement on gas supplies to China and attracted new potential investors in
gas production and transportation. The President of Turkmenistan can also
point at the agreement between Russia and Kazakhstan on purchase of gas at
$140 per 1,000 cubic meters.

Moreover, Ukraine is already prepared to offer $65 per 1,000 cubic meters to
Niyazov. Nesterov expects that Gazprom will have to make concessions to
Turkmenistan with regard to the price but even in this case the contract
will be beneficial for the Russian monopoly because it will allow simpler
building of mutual relations with Ukraine.

On June 15, the PR service of the Ukrainian cabinet announced that “If
Gazprom buys all gas of Turkmenistan this will be a serious problem for us.”

The PR service added, “We expect to receive 10 billion cubic meters of
Turkmen gas until the end of the year and plan to re-export it, which would
enable Naftogaz Ukrainy to receive $1.65 billion of additional revenues.”
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11.          UKRAINE COMPLETES WTO TALKS WITH TAIWAN

CNA, Geneva, Switzerland, Monday, June 19, 2006

GENEVA – Ukraine has completed bilateral talks with Taiwan to pave the way
for the Eastern European country’s accession to the World Trade Organization
(WTO), a Ukraine official said Thursday.

The announcement was made by Valeriy Pyatnytskiy, deputy minister of economy
of Ukraine, while reporting to a WTO working group considering Ukraine’s
application on WTO entry.

A total of 50 WTO member nations have requested talks with Ukraine, and
Taiwan is the 49th country that has completed talks with the Eastern
European state.

Three rounds of bilateral talks have been held between Taiwan and Ukraine.
In addition to economic and trade issues, Taiwan has expressed concern
during the talks over the Ukrainian government’s rejection of ROC passports
printed with the word “Taiwan” on their cover. Ukraine has dealt with the
problem at the request of Taiwan.

According to official statistics from Taiwan, bilateral trade between Taiwan
and Ukraine was valued at US$257 million in 2005, down 41 per cent from the
year-earlier level, with Taiwan posting a trade deficit of US$12 million
with the country.

Imports to Taiwan from Ukraine amounted to US$135 million, down 60 per cent
over the previous year, while exports to Ukraine amounted to US$123 million,
up 28.41 per cent over the previous year.

During the first three months of 2006, exports from Taiwan to Ukraine
increased significantly from US$15.2 million to US$31.93 million, marking an
increase of 108 per cent.

Taiwan’s exports to Ukraine are mainly machinery, textiles, consumer
electronic products and consumer products. Major imports from Ukraine
include aluminium, iron, steel, zinc and cotton.             -30-
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12. KAZAKHSTAN SUCCESSFULLY LAUNCHES ITS FIRST SATELLITE
        Sea-Launch Co satellite also launched from floating platform in Pacific

Associated Press (AP), Baikonur, Kazakhstan, Sunday, June 18, 2006

BAIKONUR, Kazakhstan – Kazakhstan sent its first satellite into space Sunday
in the oil-rich ex-Soviet republic’s first step toward fulfilling its
ambitions to join the elite club of space-exploring nations.

The KazSat 1 satellite, mounted on a Russian built Proton-K rocket, soared
into the predawn skies above the Baikonur cosmodrome in the middle of the
harsh Kazakh steppe, watched by President Nursultan Nazarbayev and his
Russian counterpart, Vladimir Putin.

The geostationary satellite is designed to provide TV broadcast and
communications for Kazakhstan, part of Russia and three other Central Asia
nations – Uzbekistan, Kyrgyzstan, Turkmenistan.

The satellite, built by Russia’s Khrunichev design center and reported to be
worth US$100 million was initially scheduled for December 2005 but was
postponed due to technical problems.

“Everything went according to plan and it gives us hope that the work of the
first Kazakh satellite will be successful as well,” said Igor Panarin, a
Russian space agency spokesman. “It is a victory for both Russia and
Kazakhstan.”

“It is a great step forward in the development of the domestic space
industry and for Kazakhstan, it means it has become a space nation,” Panarin
said.

Russian news agencies said the satellite reached its geostationary orbit at
around 0530 GMT. Neither Russian nor Kazakh space officials could
immediately be reached to confirm the orbit.

The Soviet-built Baikonur cosmodrome – the world’s largest space center -was
the scene of the historic launches of the first satellite to orbit the Earth
and pioneer cosmonaut Yuri Gagarin. Today it’s Russia’s main launch site for
manned space flights.

The Central Asian nation of 15 million had long leased the cosmodrome to
Russia, but now Nazarbayev wants his nation to build its own space industry,
the government’s ambitions fueled by its post-Soviet economic success,
pumped up by oil-dollars.

Kazakhstan is planning space exploration missions and has reached an
agreement with Russia to be part of all of Russia’s projects involving
Baikonur, said Serik Turzhanov, who heads the national space agency,
Kazkosmos.

The Kazakhs are also forming their own squad of cosmonauts, who have been
training for a few years at the Russian cosmonaut training center.

Kazakhstan and Russia have agreed to develop jointly a new launch complex
for the more environmentally friendly Angara vehicle, an alternative to the
Soyuz booster now in use, which uses poisonous fuel.

Separately Sunday, a U.S. telecommunication satellite was launched from a
floating platform in the Pacific Ocean. The Galaxy 16 satellite soared into
orbit aboard a Russian-Ukrainian-built Zenit-3SL rocket at around 0750 GMT,
according to Sea Launch Co., a joint venture that uses a self-propelled
platform and an assembly-and-control ship to perform launches.

The satellite, owned by the PanAmSaT telecommunications operator, will
provide telecommunication services to users in North America. The venture is
a partnership made up of U.S.-based Boeing Commercial Space Co; Norway’s
Aker ASA; Russian rocket designer RSC-Energia and SDO Yuzhnoye-PO

Yuzhmash of Ukraine.                           -30-
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13. US TAXPAYERS PAY FOR UKRAINIAN URBAN DEVELOPMENT

Regnum, Moscow, Russia, Saturday, June 17, 2006

LUGANSK, Ukraine – USAID and Lugansk municipal council signed on
June 16 an agreement on cooperation within the framework of the project
of economic urban development for a nine-month period.

As REGNUM correspondent was informed at the Lugansk municipal
council’s press service, the agreement envisions working out a strategic
plan of economic development of the Lugansk city at the expense of the
US budget. The agreement will be effective until March 1, 2007.

The specific amount of the project investments are not specified in the
agreement protocol. It will be detailed in October when the plan is ready.

The program of the project implementation has three steps: analysis,
planning, and implementation of the strategic plan. The final draft of the
document will have to be approved by the Lugansk municipal council
deputies at the council’s coming session.                 -30-
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LINK: http://www.regnum.ru/english/658427.html
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14. CREDIT RATING AGENCY ASSIGNS RATING TO BONDS ISSUED

 BY INTERREGIONAL PERSONNEL MANAGEMENT ACADEMY (MAUP)
 
Ukrainian News Agency, Kyiv, Ukraine, Sunday, June 18, 2006

KYIV – The Credit Rating agency (Kyiv) has assigned a long-term credit
rating of uaBBB to A-series common interest-bearing bonds worth UAH 10
million issued by the Interregional Academy of Personnel Management (Kyiv).
[MAUP] Ukrainian News has learned this from the agency’s press service.

The uaBBB rating reflects the borrower’s sufficient ability to promptly and
fully meet its obligations under conditions on the Ukrainian financial
market.

The agency says that among factors upholding this credit rating level are:
the number of the Academy’s students (round 50,000), its 17-year work
experience in the field of education, its largest regional network of
affiliates, branches and representative offices.

Over the last five years, the Academy’s total assets have grown by 15
times and as of December 31, 2005, they totaled UAH 208.8 million.

According to the Credit Rating, in five years, the establishment’s net
profit has gone up by 7 times to UAH 27.2 million; profitability of its
assets makes 13%, profitability of sales – 16.2%, while its financial
independence index is 0.83.

The volume of the planned bond issue is 5.8% of the issuer’s total revenues,
including income taxes and amortization in 2005.

The agency also points to two negative factors that restrict the rating:
dependence of state-owned and non-government higher educational
establishments on government regulations (issuance of special licenses,
regular checks, fixed preferences, etc.), as well as growing competition on
Ukraine’s market of higher education.

As Ukrainian News earlier reported, the Interregional Academy of Personnel
Management on June 15 started to sell bonds worth UAH 10 million.  The
circulation period of the bonds is five years from June 15, 2006 to June 15,
2011. The term of placement is from June 15 to July 30, 2006. The yield is
set at 17% per annum. It is planned to be paid on the quarterly basis.

The Interregional Academy of Personnel Management is one of the largest
private educational establishments. It has over 60 affiliates and
representative offices in Ukraine, and also 11 subdivisions abroad.

Assets of CJSC Interregional Academy of Personnel Management amount
to UAH 208.8 million, earnings from service sales in 2005 was UAH 167.9
million.                                           -30-

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15.                  ANTI-SEMITISM AT UKRAINIAN PARLEY

Charles Fenyvesi, Editor, Bigotry Monitor: Volume 6, Number 21
Weekly Human Rights Newsletter on Antisemitism, Xenophobia, and
Religious Persecution in the Former Communist World and Western Europe
UCSJ: Union of Councils for Jews in the Former Soviet Union
Washington, D.C., Friday, June 16, 2006

WASHINGTON – At a supposedly scholarly conference in Ukraine last

month, leaders of the Interregional Academy of Personnel Management
(MAUP) made antisemitic statements, blaming “Rothschild soldiers” for
the “genocide” of the Ukrainian people.

The Kiev-based private university with a history of antisemitism brought
together MAUP leaders, Ukrainian public figures, and representatives from
Arab countries, according to a report published last week in the school’s
magazine, “Ukrainian Newspaper Plus.”

Last year, school officials created a stir by making a series of similarly
antisemitic and anti-Zionist statements, including a call to the United
Nations to revoke the 1947 vote that created the State of Israel.  -30-
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LINK: http://www.fsumonitor.com/stories/061606BM.shtml
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16.    SIGNATURES ON REFERENDUM ON UKRAINE JOINING
               NATO ALLEGEDLY FORGED OFFICIAL SAYS

Associated Press (AP), Kiev, Ukraine, Saturday, Jun 17, 2006

KIEV – A Ukrainian opposition party allegedly falsified some of 4.5 millions
signatures collected for a referendum it was seeking to block Ukraine’s bid
to join NATO, an election official said in an interview published Saturday.

Mykola Melnik, a member of Ukraine’s Central Election Commission, was quoted
as telling the daily Zerkalo Nedeli that the signatures had been collected
with gross violations of the law and partly forged.

The signatures were collected by Ne Tak opposition bloc and delivered to the
election commission earlier this year. Once the commission confirms the
signatures’ validity, President Viktor Yushchenko must set a date for the
referendum.

Under Ukrainian law, more than 100,000 signatures in two-thirds of the
country’s regions are needed to call a referendum.

Melnik said checks revealed that some of the names on the lists of
signatures belonged to dead people, and some people said their signatures
had been forged. He added that the procedure of collecting signatures also
had been marred by violations.

“I can say that violations were organized, they were systematic, not
accidental or episodic,” said Melnik, noting that it is impossible to
immediately define how many signatures were forged. He said that the
commission’s conclusions had been sent to law-enforcement officials.

Bloc member Ihor Shurma denied all the accusations on Saturday. “The more
they try to stop the referendum, the more people will oppose joining NATO,”
he said.

Yushchenko has made NATO membership a top priority, but many Ukrainians,
particularly in the Russian-speaking east, still have a negative attitude
toward their former Cold War foe.

The alliance said it would help Ukraine push through the necessary reforms,
but has dodged questions about when it might offer membership.

This month anti-NATO demonstrations by pro-Russian parties and the
Communists had forced U.S. Marines sent to the Black Sea peninsula of

Crimea to prepare for military exercises to leave Ukraine.                   -30-
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17.         EUROPE TWITCHES OUT OF EUROPARALYSIS

EDITORIAL COMMENT: Financial Times
London, United Kingdom, Saturday, June 16 2006

One year on from the seismic shock of the French and Dutch rejection of its
constitution, the European Union still does not look ready to emerge from
the political underground. At their summit yesterday and today in Brussels,
EU leaders are expected to kick for touch and extend for another year their
“pause for reflection” on the Union’s future. “If everything goes well,” a
diplomat preparing the summit observed to Reuters, “no one will ever notice
this summit happened.”

Despite the elaborate and elongated timetables proposed for salvaging bits
of the constitution needed to make an EU of 25-plus work, the discussion on
Europe’s institutional future, to the extent it takes place at all, is going
nowhere. The reason there have been fewer rows of late is that this period
has been more pause than reflection.

Similarly, the question mark over any future enlargement of the Union –
arguably the EU’s single most successful policy – seems to get bigger. The
rejectionists of more expansion, especially to include Turkey and,
eventually, Ukraine, are using this summit to build up their defences behind
a clause in the so-called Copenhagen criteria that refers to the Union’s
capacity to “absorb” new members.

These issues are much harder to finesse than the familiar quarrels between
the apostles of integration and defenders of a Europe of nations, between
federalists and intergovernmentalists, deepeners and wideners.

Not least, those disputes were mostly jousts between leaders, while this
crisis was triggered by the citizenry. There is, furthermore, an emotional
dissociation between people’s feelings towards Europe and about its
institutions of governance. Europeans still expect their leaders, singly and
in association, to provide them with practical benefits ranging from jobs to
clean air.

Is there, therefore, nothing in prospect but europaralysis? Hardly.

Germany, the EU’s largest economy and world’s biggest exporter, is on the
economic rebound and flirting again with reform.

There has indeed been a modest recovery in economic growth across the Union.
That has been most pronounced in the economies of the new member states, and
EU leaders should have the wit to demonstrate how enlargement exploits
globalisation by sucking in investment and jobs that benefit the EU as a
whole.

Some welcome leadership changes have taken place. More are in prospect, in
the UK and in France, where reform ideas are starting to get a hearing.
Abroad, the EU has started to demonstrate cohesion, transatlantic relations
have improved, and Russia’s veiled threats to EU energy security have
usefully pushed Europeans together. After much bluster, moreover, the US is
backing European diplomacy with Iran as the only plausible way forward.

The summit is not the whole picture. The EU has plenty to offer its
citizens. Its leaders are just no good at selling it.

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18.     YUSHCHENKO NOT TO USE ADMINISTRATIVE LEVERS
                         TO FORM POLITICAL COALITION

Ukrainian News Agency, Kyiv, Ukraine, Sunday, June 18, 2006

KYIV – President Viktor Yuschenko says he will not imply administrative
pressure on the participants in the coalition talks to see it formed. Ivan
Vasiunyk, the first deputy head of the presidential secretariat, told this.
“The president has not used and will not use the administrative levers to
have the coalition formed,” Vasiunyk said.

He also said the president was not trying to influence the position of the
Our Ukraine bloc, though he is the honorary leader of the Our Ukraine
Peoples’ Union party, which is a member of the Our Ukraine bloc. Vasiunyk
said the president would not go beyond his constitutional authorities in the
coalition talks. Vasiunyk would not comment on possible dissolution of the
parliament by the president.

He said there were two legal interpretations on when the president may
dissolve the parliament. The first interpretation suggests that the
president may dissolve the parliament if a coalition is not formed within 30
days, the second interpretation suggests that the parliament may be
dissolved if the Cabinet of Ministers is not formed within 30 days from the
creation of the coalition.

Vasiunyk said it was the stance of the president that the blocs and the
parties themselves would be responsible and would be assessed by their
voters during the regular or early parliamentary elections.

In the opinion of the president, Vasiunyk said, the coalition talks were not
completed as the participants violated the key principles in the
distribution of portfolios among the coalition participants.

The principles concern, Vasiunyk said, the proportional distribution of
portfolios in compliance with the returns in the parliamentary elections,
the turn of claiming portfolios, and no claims for portfolios that are in
the competences of the president under the constitution.

The president believes, according to Vasiunyk, that the situation follows
the imperfect changes in the constitution including on the restrictions of
the presidential power.

“Imperfect changes in the Constitution including the restrictions of the
authorities of the president have entailed the current situation in the
state,” Vasiunyk said.

Yuschenko believes, according to his spokesman, that the inauguration of the
judges of the Constitutional Court must be the first step to be taken by the
Verkhovna Rada. Otherwise, the president will refuse to submit the candidacy
of the next premier to the Verkhovna Rada, Vasiunyk said.

The president also calls on the Verkhovna Rada to observe the time limit set
by the constitution to create the coalition and the new Cabinet of
Ministers. As Ukrainian News earlier reported, Yuschenko favors the creation
of a coalition by the Our Ukraine bloc, the Socialist Party, and the Bloc of
Yulia Tymoshenko.

On June 10, the Our Ukraine bloc, the SPU, and the BYT stopped their
coalition talks due to differences on the position of the Verkhovna Rada
speaker. On June 15, the Our Ukraine bloc and the Party of Regions started
talks on forming a coalition. The BYT and the SPU said they would transfer
to the opposition if , the Our Ukraine bloc and the Party of Regions form
the coalition.                                 -30-
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19. YUSHCHENKO SAYS TYMOSHENKO SHOULD DEMONSTRATE

      ABILITY TO BE EFFECTIVE IN UKRAINIAN COALITION TALKS 

Interfax, Kyiv, Ukraine, Saturday, June 17, 2006

KYIV –  Ukrainian President Viktor Yushchenko said that a politician who

spires to be prime minister should demonstrate the ability to engage in
constructive and effective talks on the creation of a collation.

“I have been and am an advocate of uniting the Orange team. If we want to
preserve the unite Orange team, its members should not abuse the language of
pressure and hypocrisy. Leaders of the Yulia Tymoshenko Bloc, the Socialist
Party of Ukraine and the Our Ukraine Bloc should assume responsibility for
dragging on the process,” the president said in a traditional radio address
to the nation on Saturday.

“First and foremost, a politician aspiring to be prime minister should
demonstrate the ability for constructive and effective talks. Because he
will be responsible for Ukraine’s economy and social reforms tomorrow,”
he said.

Eighty-two days of negotiations have shown that career ambitions often
have the upper hand over state and even party interests, the president said.
“The temptation to ignore the principles underpinning the formation of a
coalition” accounts for the fact that talks have yet to bring any results,
Yushchenko said.

“I am sure that we should keep to the principles of forming a coalition.
Firstly, the jobs at all levels that are provided by the Constitution should
be distributed on the basis of the results of the elections.

Secondly, the political force with the majority of votes should choose
either the prime minister job or that of speaker of the parliament, while
other political forces should get other positions. And finally, the jobs of
heads of departments, which are, according to the Constitution, filled by or
coordinated with the president, are not subject to these negotiations,” the
president said.                                -30-
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20. UKRAINE LEADERS WORK THROUGH WEEKEND ON COALITION

Reuters, Kiev, Ukraine, Monday, 19 June 2006

KIEV: Bickering politicians in Ukraine toiled through a weekend of talks to
form a government, with voters once elated by the “Orange Revolution” now
wearily hoping the country can avoid social or constitutional upheaval.

Pro-Western President Viktor Yushchenko, thrust into power after the 2004
mass protests, no longer chooses his prime minister under new constitutional
rules, but can dissolve the parliament elected in March if it forms no
stable coalition.

Frustrated at delays, he says the deadline for a government to be formed is
Thursday. The president says he hopes three groups behind the Revolution –
his Our Ukraine Party, ex-premier Yulia Tymoshenko’s bloc and the smaller
Socialists – will set aside their differences and forge a government team.

His party allies are hedging their bets and holding parallel talks with the
Regions Party of Viktor Yanukovich, initially declared the winner of the
presidential election in 2004 but humiliated when he lost a re-run ordered
by the courts.

“Let me stress again: 82 days of talks have shown that career ambitions
often outweigh the interests of state or even those of parties,” Yushchenko
said in his weekly radio address. “Let’s not look for external enemies here.
Politicians should rather find within themselves strength for compromise and
co-operation.”

The two sets of discussions proceeded throughout Sunday. A Socialist Party
spokesman said liberals were discussing the sensitive carve-up of
ministerial responsibilities in any future “orange” coalition. Liberal unity
was shattered when Yushchenko sacked Tymoshenko as prime minister last

year.

Our Ukraine’s separate talks with Yanukovich’s party, more sympathetic to
Russia, focussed on differences like the Regions Party’s opposition to
closer ties with Nato. Yanukovich predicts a deal within days putting his
party in government.

                  PARLIAMENT, GOVERNMENT HOBBLED
The impasse has virtually shut down parliament and hobbled government
activity. A US presidential visit was postponed as were war games with
Britain needing the assembly’s approval.

Yushchenko said this month he would not dissolve the chamber if talks
failed. He has since been cautious, describing himself as a football referee
“whose sole right is to use his whistle”.

Yanukovich’s Regions Party came first in the March poll with 186 seats. But
the three “orange” parties command 243 seats between them in the 450-member
assembly.

Most rows among the liberals focus on top jobs. The president has accused
Tymoshenko of sabotaging the talks, but agrees she could become premier
again.

Tymoshenko, who played a key role in the 2004 protests, was sacked after
less than eight months in office to end infighting.
Some presidential allies say that if Our Ukraine teamed up with Yanukovich,
abandoning an “orange” coalition, it would restore investor confidence.

Tymoshenko’s bloc had the best showing in March of liberal parties. She
rejects any prospect of a government including Yanukovich, the figure so
fiercely opposed in the revolution.                        -30-
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21.                 STRUGGLE FOR FUTURE OF UKRAINE

COMMENTARY: By Tammy M. Lynch

The ISCIP Analyst, An Analytical Review, Volume XII, Number 6
Institute for the Study of Conflict, Ideology & Policy
Boston University, Boston, MA, Thursday, June 15, 2006

What will Ukraine be in the future? Which way will it turn? Pundits have
been asking these questions for almost 16 years, and today it became clear
that the answer isn’t! Ukraine’s own politicians continue to fight amongst
themselves over the future geopolitical direction of the country.

The country has been run by an acting government since the 26 March
parliamentary election. On 13 June, President Viktor Yushchenko’s Our
Ukraine party officially voted to begin negotiations to create a
parliamentary majority with all political parties” in the parliament,
including the party of his defeated presidential opponent, Viktor
Yanukovich. (1)

Yanukovich’s Party of Regions is intensely pro-Russian, and has voted
repeatedly in the past against EU-reform measures as well as procedural
changes necessary to enter the WTO. In recent weeks, it has been one of the
leaders of the vitriolic, if small, anti-American and anti-NATO protests in
the Crimea, and also has sponsored local measures to make Russian a state
language. President Yushchenko has called these measures illegal and against
Ukraine’s constitution.

Our Ukraine’s vote to negotiate with Regions followed the former’s decision
to withdraw from negotiations to recreate an “orange coalition” with
long-time partners The Yulia Tymoshenko Bloc and The Socialist Party. Our
Ukraine suggested that the demand by Socialist leader Oleksandr Moroz to be
named speaker derailed the talks. “We can state that talks are stopped
because of a categorical position of the Socialists,” Our Ukraine
spokeswoman Tatiana Mokridi said. (2)

However, both Moroz and Tymoshenko claimed that this reason was simply a
pretext to legitimize talks already ongoing with Regions at an unofficial
level. This suggestion was given weight by the repeated statements of Acting
Prime Minister Yuriy Yekhanurov –number one on the Our Ukraine election
list – that he prefers a coalition with Regions, and by the recent creation
of an “inter-party alliance” of Our Ukraine and Regions parliamentary
deputies. (3) Most Our Ukraine members in this alliance appear to have
business or financial interests that coincide with those of the Party of
Regions.

Moroz called Our Ukraine’s bluff on 14 June, when he announced that he’d
dropped his claim to the speaker’s chair. (4) He suggested, though, that all
posts should then be open for negotiation. Tymoshenko, who would be prime
minister in the format of an orange coalition, then urged Our Ukraine to
come back to the negotiating table, suggesting that Moroz’s concession had
removed all impediments to a deal.

This would seem to be the case, since Our Ukraine had announced earlier that
a comprehensive agreement on a program had been finalized by negotiators,
and that only the speaker’s position remained in dispute. (5)

However, it appears that Our Ukraine has moved the bar. Following Moroz’s
statement, one of the party’s most influential members Petro Poroshenko
called the concession “positive.” But he quickly added, “Now all that’s left
is for Yulia Volodymyrivna [Tymoshenko] to give up the prime minister’s job
and we’ll have a coalition.” (6)

The idea that Tymoshenko would give up the prime minister’s seat, as the
leader of the largest party by far (22% compared to Our Ukraine’s 14% and
Socialists 6%) in the proposed coalition, is odd. This is particularly true
given President Viktor Yushchenko’s recent statement supporting the idea
that the largest party in the coalition should name the prime minister, and
statements from negotiators that this point already had been agreed.

Were she to do so, given Moroz’s concession on the speaker’s point, Our
Ukraine then would have its representatives in the president’s office, the
prime minister’s chair, all the “Power” Ministries, and as the head of
parliament–all for a party that finished third with slightly under 14% of
the vote.

It would seem, then, that the speaker issue was not the only stumbling bloc.
Or at least, it was not the only stumbling bloc that will be found to avoid
creating a coalition.

It should be noted, however, that the vote by Our Ukraine’s political
council to negotiate with the Party of Regions was not unanimous. In fact,
during parliamentary debate, a sizeable portion of Our Ukraine gave Moroz a
standing ovation following his statement.

Even more, Mykola Katerinchuk, the head of Our Ukraine’s political council,
said during parliamentary debate, “To form a coalition with the Socialists
and Tymoshenko’s bloc might mean that some politician would lose, but to
form a coalition with the Party of Regions would mean that our national
interests lose.” (7) These two actions signal a widening rift in an already
porous political bloc.

Given this rift, can Our Ukraine unite behind any coalition? Parliament has
until 25 June, according to the constitution to name a majority, or
President Yushchenko is entitled to call a new election.

In recent polls, Our Ukraine’s support has dropped below 10%, while support
for the Socialists and the Tymoshenko Bloc has risen slightly, and support
for the Party of Regions has increased significantly. It is, therefore, in
the interests of not only the country but also the members of all “orange”
parties to avoid this scenario.
——————————————————————————————————
                                             Source Notes:
(1) “Our Ukraine to Team Up With Yanokovichists?,” Ukrayinska Pravda,

13 Jun 06 via http://www.pravda.com.ua.
(2) Our Ukraine press service, 1319 CET, 10 Jun 06 via http://www.razom.org.ua.
(3) “About 20 Ukrainian pro-government, opposition MPs join forces,”
Ukrayinska Pravda, 7 Jun 06 via Lexis-Nexis.
(4) Moroz tribune speech, Verkhovna Rada (parliament), 5 Kanal, 14 Jun 06;
also ITAR-TASS, 1224 CET, 14 June 06.
(5) Orange coalition has agreed on all items except portfolios, 10 Jun 06
via ForUM.
(6) Associated Press, 14 Jun 06 via Kyiv Post (www.kyivpost.com).
(7) Verkhovna Rada debate, 5 Kanal, 14 Jun 06; also Associated Press, 14
Jun 06 via Kyiv Post. Volume XII, Number 6, 15 June 2006
————————————————————————————————
By Tammy M. Lynch (tammymlynch@hotmail.com)
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22.    RUSSIA’S PUTIN WANTS TO REBUILD RUSSIAN EMPIRE

LETTERS-TO-THE-EDITOR: By Peter Borisow
Letter sent to Los Angeles Times (letters@latimes.com) June 10, 2006
Action Ukraine Report (AUR) #714, Article 22
Kyiv, Ukraine, Monday, June 19, 2006

RE: “Crimea Digs In Against Ukraine’s Western Drift”,
Los Angeles Times, Los Angeles, CA, Thursday, June 8, 2006, p.A24

To the Editor:

Russia’s Putin wants at all costs to rebuild the Russian Empire.  He knows
there can never be a Russian Empire without Ukraine.  Having willingly given
up their nuclear arsenal a decade ago, Ukrainians know that without the West
and NATO, it will be very difficult to defend their freedom against Russia.

Putin hopes to weaken support for Ukraine in the United States by painting
Ukrainians as anti-American.  Ukrainians are not anti-American.  Ukraine is
America’s and the West’s natural friend and partner in Eastern Europe.
However, many Russians living in Ukraine are both anti-American and
anti-Ukrainian.

Russians generally seem to be haunted by their historical prejudices.  It is
no co-incidence that virtually all the Russian oligarchs who are imprisoned
or have been forced to flee Russia “just happen” to be Jewish.  The Russian
government is taking steps to limit the rights of “religious sects”.

Freedom of speech is long gone.  Strong arm government and intolerance
rule.

Russians living in Crimea would like to re-establish Russian rule in Crimea
and in time, in Ukraine.  Ukrainians will not have it.  10 million
Ukrainians were killed in the Moscow ordered genocide of 1932-33.  Vast
areas of eastern Ukraine lost all their population and were then repopulated
by ethnic Russians.  Bringing Russian rule to Crimea or any other part of
Ukraine would be like bringing Hitler’s unrepentant grandchildren to rule in
Israel.

When Stalin ethnically cleansed Crimea by forcibly deporting its entire
native Tatar population, he also repopulated Crimea with native Russians,
many of whom were ultra-nationalistic Russian military families.  This
assured a loyal Russian population to secure the soft underbelly of the
USSR, as the Russian Empire was known in the 20th century.

These Russians stayed in Crimea after the liberation of Ukraine in 1990 and
remain a fifth column, loyal to Moscow and ready to take whatever direction
Putin gives to disrupt and embarrass Ukraine.  The better headline would
have been, “Russians in Crimea Want Americans, Ukrainians and Everyone

Else to Leave.”

Peter Borisow, President, Hollywood Trident Foundation
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
23.  ODESSA PHILHARMONIC ORCHESTRA WITH CONDUCTOR
         HOBART EARLE TO PERFORM TWO CONCERTS IN KYIV
                       Sunday, June 18 and Monday, June 19, 2006

Action Ukraine Report #713, Article 23, Kyiv, Ukraine, Sat, June 17, 2006

KYIV – The Odessa Philharmonic Orchestra, conducted by Music Director

and Principal Conductor Hobart Earle, will perform two concerts in the Hall of
Columns of Philharmonic Hall, Kyiv on the evenings of Sunday, June 18 and
Monday, June 19. Both concerts will begin at 19:00.

On Sunday evening, June 18, the orchestra will be joined by the National
Choir of Ukraine (“Kapella Dumka”), Yebhen Savchuk, choirmaster for a
performance of Mozart’s “Requiem”. The four vocal soloists are: Nataliya
Yutesh, soprano, Olena Vishnevskaya, mezzo, both from Odessa — and Ihor
Borko, tenor and Dmitro Ageev, bass — both from the National Opera of
Ukraine.

On Monday evening, June 19, Hobart Earle will conduct an orchestral

program featuring two large tone poems by Richard Strauss:

MOZART — Overture to “Don Giovanni” KV. 527
Richard STRAUSS — Symphonic Poem “Don Juan” Op. 20
MOZART — Maurerische Trauermusik (Masonic Funeral Music) KV. 477
Richard STRAUSS — Symphonic Poem “Tod und Verklaerung” (Death

and Transfiguration) Op. 24

Tickets are on sale at the Philharmonic Hall box office – tel. number
278-1697.

The orchestra and Hobart Earle are well known to audiences in the capital
thank to their annual visits to perform in Kyiv, dating back to the very
first days of independence of Ukraine in the early 1990s.

Under the leadership of American conductor Hobart Earle, the Odessa

Philharmonic Orchestra was the first symphony orchestra from Ukraine to
cross the Atlantic Ocean, performing in such concert halls as Carnegie Hall
in New York and the Kennedy Center in Washington, D.C., Orchestra Hall
in Chicago, Davies Hall in San Francisco, Massey Hall in Toronto and the
General Assembly of the United Nations.

In 1995 they also became the first symphony orchestra from Ukraine to cross
the Equator, performing in the Festival of Perth in Australia, and their
regular concerts in numerous Western European countries have been well
received by critic and audience alike, over the years.

The Odessa Philharmonic Orchestra is the first performing arts organization
in the entire country to have had its funding status raised by the
government of Ukraine from regional to federal to national, since the
independence of Ukraine in 1991.

Hobart Earle first conducted the orchestra in April 1991 — before the
independence of Ukraine — and recently celebrated 15 years at the helm of
the Odessa Philharmonic Orchestra.                    -30-

————————————————————————————————
FOOTNOTE:  Your editor attended the performance of the Odessa
Philharmonic Orchestra in Kyiv last evening.  Outstanding.  AUR EDITOR
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24.                          WHERE NOW FOR UKRAINE?
                     WAITING GAME SELLS UKRAINE SHORT

INFORM: Newsletter for the international community providing
views and analysis from the Tymoshenko Bloc (BYUT)
Kyiv, Ukraine, Issue 3, Thursday, 15 June 2006

                                WHERE NOW FOR UKRAINE?
The saying ‘a week in politics is a long time’ rang true yesterday when the
presidential bloc Our Ukraine failed to agree a coalition government. It
became evident over the weekend that the coalition talks had all but
collapsed when Our Ukraine rejected the proposal for the Socialist Party
(SPU) leader Oleksandr Moroz to hold the post of Chairman of the

Verkhovna Rada (parliament).

A statement from the party read: “Our Ukraine is sorry for the personal
ambitions of SPU leader ruined negotiations.” Appreciating that coalition
talks were deadlocked, on 14 June Moroz made the noble gesture and
relinquished his claim to Speaker in return for a fair and proportional
distribution of other portfolios.

On 14 June, Our Ukraine rebuffed Moroz’s offer saying that it was against
any quota principle of power distribution and that the matter was regulated
by the Constitution of Ukraine. So the deadlock continues. Meanwhile Our
Ukraine is openly courting the Pro-Russian Party of Regions with caretaker
prime minister, Yuri Yekhanurov in favour of a broader coalition with Viktor
Yanukovych’s party.

“Given Mr Moroz’s strong reputation for fighting corruption and upholding
the ideals of democracy, one could be forgiven for thinking there are
ulterior motives at play,” said Mykola Tomenko, BYUT MP and former deputy
prime minister.

Commentators have remarked that many in Our Ukraine share financial or
business interests that coincide with the Party of Regions. In contrast,
Moroz is a respected exponent of morality in politics and campaigned
tirelessly against former President Leonid Kuchma. Others see the move as
nothing more than a pretext to wriggle out of an Orange coalition in favour
of a ‘grand coalition’ with Party of Regions – a suggestion voiced by Yulia
Tymoshenko on Saturday.

President Yushchenko’s role in the coalition talks is also perplexing. It
ranges from being intimately involved to close supervision, then, at times,
to a lofty distance from those negotiating on behalf of the party he leads.

Clearly disappointed with yesterday’s plenary session, Yulia Tymoshenko,
BYUT’s leader is still hopeful that the president will exert his authority
to realise an Orange coalition government: “Time is running out rapidly but
I will do all I can to reach an eleventh hour agreement. We owe this to the
electorate who placed their faith in us. If we do not prevail, I will lead
an opposition the likes this country has never seen before.”

               WAITING GAME SELLS UKRAINE SHORT
The political vacuum caused by three months of protracted coalition talks
signaled to the outside world that Ukraine is a country in transition and an
unstable bet for immediate investment. Consequently, the economy, which
visibly slowed during the run up to the parliamentary election, has stagnated

with investor cheque books remaining firmly shut for the time being.

As if to compound the air of uncertainty, consumers have been told to brace
themselves for huge hikes in electricity, rail and gas prices. At the same
time Gazprom, the Russian state owned gas company, has warned that the
Ukrainian state gas company, Naftogaz Ukrainy, is not pumping sufficient
volumes of gas into its underground storage facilities.

Gazprom spokesman, Sergei Kupriyanov said, “This may lead to problems

in the winter in supplying the needs of the domestic market, as well as in
fulfilling contracts on gas transit [to Europe], when gas will be in high
demand both in Ukraine and Europe.”

The political vacuum is perhaps most indicative of a weak central
administration and has been interpreted as a green light by those wishing to
exploit ethnic and regional tensions. This was evident in sporadic
pro-Russian language protests and the more heated anti-NATO demonstrations,
the latter focused on 250 US marine reservists who had disembarked in Crimea
to prepare for the joint NATO-Ukraine ‘Sea Breeze’ exercise.

Planned for June, the exercise has taken place annually since 1997 without
rancour. On 7 June, the parliament failed to authorise
‘Sea Breeze’ and the joint British-Ukraine ‘Tight Knot’ exercises. Both were
duly shelved.

This setback combined with the failure to appoint a reform-oriented
government, resulted in the postponement on 8 June of President Bush’s
proposed visit to Ukraine. Instead it was announced that the US President
would visit Budapest to mark the 50th anniversary of the Hungarian uprising.

While Ukraine fumbles through the darkened halls of the democratic process,
the economy, business and people have suffered. Painfully aware of the
implications of any delay, BYUT and the SPU were ready to agree a coalition
government within days of the election results and a coalition protocol was
inked by all three parties on 13 April.

Furthermore, as prime minister in waiting, Tymoshenko went out of her way to
mollify the concerns of an anxious business community, talking to visiting
investors, the American Chamber of Commerce and even flying to London to
reassure representatives of the investment community, financial press and
the British-Ukrainian Chamber of Commerce.

“Sadly, it is now clear why certain factions within Our Ukraine vacillated,”
said Yulia Tymoshenko. “Although the economy is in paralysis, the President
still has it in his power to resolve the situation, for only an Orange
coalition government will have the strength to fight corruption, introduce
market economy reforms and keep Ukraine on a westward trajectory.”
———————————————————————————————-
Questions or comments? E-mail us at taras@byti.org.ua
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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